How does Private Financing work?
If you have purchased your home and it is closing and your existing home has not sold, then you may have to take out a private loan:
This option is expensive and is based on you having enough equity in your current property to qualify. Typically, private financing comes with a high interest rate 7 - 15% plus an upfront lender fee + broker fee.
These amounts will vary based on your specific situation, such as time required for loan, loan amount, loan to value, credit bureau, property location, etc.
Clearly, private financing is expensive, but it could be cheaper than lowering the purchase price of your existing home by tens of thousands of dollars to sell your existing home quickly.
Your bank doesn’t do this type of financing so you will need to use a specialized mortgage broker who has access to individuals that lend money out privately.
Bridge financing & private financing are solutions when your buy and sell days don’t work.
